The price of a barrel of crude oil continues to fall in global energy markets.
Along with that, share prices for oil and natural gas companies such as BP PLC (NYSE: BP), Chevron (NYSE: CVX), and ExxonMobil (NYSE: XOM) continue to plunge. As many previous articles on this site have reviewed, oil stocks should be excellent investments for the long term. Investors should take advantage of the lower prices to accumulate shares for rewarding long term total returns.
For 2014, BP Plc is off by 2.65 percent, Chevron has fallen by nearly 11 percent, and ExxonMobil is down by more than 10 percent.
While the short term is bleak, for the long term is a bright future of oil companies. Global energy demand is expected to increase significantly, according to reports from BP and ExxonMobil, along with the International Energy Agency’s findings. Of that increasing need, fossil fuels will take care of the bulk. Oil and natural gas will be the major players.
That increasing demand should lift the price of a barrel of crude oil, which will take the prices of BP, Chevron, and ExxonMobil higher.
Until that happens, each has a high dividend yield that is well above the average of around 2 percent for a member of the Standard & Poor’s 500 Index (NYSE: SPY). The dividend yield for BP PLC is 4.82 percent. Chevron pays is shareholders an income stream that comes at a rate of 3.59 percent. For ExxonMobil, the dividend yield is 2.81 percent. For income stocks, the oil sector is very strong.
Each of these companies has a history of increasing the dividend amount, too.
That contributes to making BP, Chevron, and ExxonMobil very compelling as long term investments. The global demand for oil and natural gas will only increase in the years ahead. From that, stock prices for companies in the sector will rise. The dividends from BP PLC, Chevron, and ExxonMobil will add to the returns for long term investors.